Heineken, the world's third- biggest brewer, said poor spring weather in Europe led to weak second-quarter revenue and predicted earnings this year won't grow as consumers curb spending. The company witnessed a "further moderation versus what we had expected after the first quarter", chief executive Jean-François van Boxmeer told reporters.

The second quarter was “clearly below” company expectations “and that will have an impact on total outlook for the year”.

Group beer volume fell 3 per cent in the first half, the Amsterdam-based brewer said, led by an 8 per cent decline in western Europe after an increase in French beer taxes and a prolonged spell of cool weather.

Cost-saving target

Heineken had said in April that revenue and volume would improve this year more slowly than previously anticipated. The company said it expected no organic growth this year in net income. First-half profit on that basis fell to €679 million from €688 million a year earlier, the brewer said.

Heineken fell as much as 3.9 percent in Amsterdam trading, the steepest drop since June 20th. Heineken raised its cost-saving target to €625 million between 2012 and 2014. It had previously forecast reductions of €525 million.

“The good news is that the cost savings are ahead of expectations, but the bad news is it’s still struggling with tough markets and a couple of months of good weather isn’t going to offset a bad spring,” Trevor Stirling, an analyst at Sanford C Bernstein said. – (Bloomberg)